Verge (XVG) Pumps (and Dumps) on Bithumb Listing

Justine Pope

Even though the cryptocurrency markets are still in a bearish trend, some altcoins have been seeing upwards price movement. As bitcoin’s USD price has stabilized over the past week, some analysts are suggesting that altcoins could start seeing some much-needed price action. One example is Verge (XVG).

Originally called DogeCoinDark, XVG was recently awarded listing on Bithumb. Bithumb is the third largest exchange by volume, racking up 415,000 BTC (or approximately $1.6 billion) in 24-hour trading volume. This listing is the only market for XVG/KRW, meaning that users of the South Korean exchange Bithumb will be able to buy XVG with their KRW for the first time. Verge is already listed on Bitfinex, Binance, and Bittrex, but this Bithumb listing gives even more people access to XVG.

Bithumb tweeted about the Verge listing at 6:05 PM on November 28, 2018:

Data from CryptoCompare shows that this listing has given Verge a turbulent week.  Before the announcement, XVG’s price was consolidating around $0.006. The price started climbing up, and once the listing was live, jumped all the way up to $0.010, for a gain of 67%. The hype quickly died off, and after a small double top, the price tumbled down to $0.0073, for a drawdown of 27%.

hour_CryptoCompare_Index_XVG_USD_337_11543583205413.pngFrom: CryptoCompare

Like most cryptocurrencies, 2018 has not been fun for Verge. Before the 2017 bull run, XVG’s price was consistently around $0.007, until its privacy features started gaining attention in cryptocurrency circles. Then, infamous cryptocurrency promoter John McAfee started tweeting about XVG, and Verge began its rapid ascent in price.

XVG saw an enormous surge all the way up to $0.24, but since the bear market started, it’s crashed all the way back down to its 2017 levels around $0.007. Despite this, Verge has kept its footing and remains the 46th largest cryptocurrency by market cap, with a valuation of $112.5 million.

day_CryptoCompare_Index_XVG_USD_366_11543583698403.pngFrom: CryptoCompare

Blockchain-Enabled Chinese Yuan Could Increase Governmental Oversight, Investor Argues

The Chinese government has been closely studying blockchain technology in order to determine whether the immutable distributed ledger can be used to streamline routine business processes.

However, Chinese authorities have expressed concerns regarding the use of cryptocurrencies in financing illicit activities and potentially disrupting the country’s $12 trillion economy by facilitating capital flight.

People’s Bank of China Considering Blockchain-Based Yuan

While China’s government has attempted to restrict transactions involving cryptocurrencies, the People’s Bank of China (PBoC) has reportedly been conducting research to determine the feasibility of launching a blockchain-based Chinese yuan (CNY) since 2014.

This, according to Dovey Wan, a founding partner at Primitive Ventures, a “market cycle agnostic” investment firm which has invested undisclosed amounts into various cryptoasset projects such as ZCash (ZEC) and DFINITY.

Wan, who earned her Masters in Information Systems from Carnegie Mellon University, wrote in a blog post published on CoinDesk on May 17, 2019 that the digital yuan, or Renminbi (RMB), initiative may potentially allow the Chinese government to exercise greater control over the nation’s local and international economy.

M0 Versus M2

As explained by Wan, digital fiat currencies allow financial institutions to more effectively create credit flows which increase M2, the broad money supply. Meanwhile, blockchain-based digital currencies impact a base currency measure, referred to as M0.

Blockchain-enabled digital currencies could potentially allow central banks to “bypass commercial banks” in order to directly control money creation and supply channels. This would structurally centralize the central financial institution’s power and role in formulating monetary policy, Wan argued.

Chinese Government Will Most Likely Use Permissioned Network

According to Wan, the PBoC is looking at various types of network design for a digital, blockchain-powered RMB. She believes that it will most likely be a permissioned network in which the nodes will be managed by major Chinese financial institutions, including the PBoC.

This indicates that transactions involving a digital yuan would only be seen by Chinese banks, and not the nation’s citizens.

Blockchain-Powered Currencies Enable “Better Coordination Paradigm”

One of the main reasons for using blockchain technology, Wan noted, is to take advantage of “a better coordination paradigm” when compared to “traditional currency supply management, which is heavily dependent on bookkeeping,” Wan wrote.

Moreover, Wan thinks blockchain’s immutable nature and private-key cryptography can prohibit users from entering fraudulent transactions and also prevent users from counterfeiting currency notes.

A blockchain-based yuan could also assist the Chinese government in more carefully monitoring the spending history of the nation's residents. This would allow the government to "accurately assess creditworthiness" and detect illegal activities such as money laundering and tax evasion, Wan noted.